On Sunday, Ghana announced a partial removal of fuel subsidies in the country, effective today.
The measure makes Ghana the third African country, behind Cameroon and Egypt, to cut fuel subsidy this month.
As Ghana has struggled with a tight budget deficit and consistently mounting debt, the move has largely been encouraged by the International Monetary Fund and other agencies, as it is designed to slash spending and encourage financial stability. Officials say removing the subsidy, which was just reinstated in April, will have significant positive influence the health of the economy. Reports claim that the head of the Chamber of Bulk Oil Disributors stated in June that fuel subsidies had bled the country of $85 million in additional payments.
Minister of Energy Emmanuel Kofi Buah also stated that the subsidies cost Ghana $85 million cedis ($25.6 million) bi-weekly.
“These new prices mean that we have removed the subsidy relating to the price of the products as a first step. We are also taking a look at the rest of the subsidy, which covers foreign exchange differentials,” the minister said.
Recall Ghana faced a critical fuel shortage last month, due to delayed payments to oil importers by the government.
Premium petrol in Ghana will now sell at 3.36 cedis ($1.02) each liter, a 23% increase. Diesel and liquefied petroleum gas is set to increase 22% and 15.7% respectively.
The news comes at a troubling time for Nigerians as well, as fuel costs rise and subsidy removal remains an ever-pressing topic.